Frontier Agriculture
Member
World markets
US wheat futures closed higher over the week due to the knock on effect of strong soybean markets following a bullish USDA report that showed bean stocks falling. News for wheat was far less bullish, however, as stocks continue to rise and favourable weather supports production around the world. US corn stocks are projected to be the highest in 30 years by the end of 2016/17. Wheat inventories are also predicted to be higher, with world stocks expected to set a new record at 257.3mmt or 36% of annual consumption. With the exception of Argentina, stocks in all the major exporting countries were increased by the USDA. Argentinean exports were seen as remaining unchanged, with new crop production raised by 3mmt but carry in cut by 3mmt, taking exports back to square on the last report. Before the arrival of the USDA report, US crop ratings were increased at the beginning of the week to 62% good to excellent versus only 43% at the same time last year. Weather last week was cool and wet, particularly for Southern and Central US with the north looking dryer. Canada has had some showers but remains cool.
Weather across Europe is generally wet, with the exception of Poland which is the only area with a soil moisture deficit. Matif managed to close slightly higher over the week supported by active exports, with weekly export licenses at 643,000t for a season total of 28.4mmt. This is down 2mmt or 6.5% on last year. A big discount to Russia is allowing French wheat to price into a range of destinations that wouldn’t usually be feasible, such as India, which is boosting export figures. There is a bigger crop coming for Russia next season though and in rouble terms, the Russian farmer is still getting a much better price than a year ago, so competition is sure to remain fierce once the new harvest arrives.
UK market
London wheat closed higher on Friday with better volumes traded. Friday was the best day of the week and net gains were slightly higher over the week, with Nov 16 at £117.55/t, £0.25/t higher on the day.
US wheat futures closed higher over the week due to the knock on effect of strong soybean markets following a bullish USDA report that showed bean stocks falling. News for wheat was far less bullish, however, as stocks continue to rise and favourable weather supports production around the world. US corn stocks are projected to be the highest in 30 years by the end of 2016/17. Wheat inventories are also predicted to be higher, with world stocks expected to set a new record at 257.3mmt or 36% of annual consumption. With the exception of Argentina, stocks in all the major exporting countries were increased by the USDA. Argentinean exports were seen as remaining unchanged, with new crop production raised by 3mmt but carry in cut by 3mmt, taking exports back to square on the last report. Before the arrival of the USDA report, US crop ratings were increased at the beginning of the week to 62% good to excellent versus only 43% at the same time last year. Weather last week was cool and wet, particularly for Southern and Central US with the north looking dryer. Canada has had some showers but remains cool.
Weather across Europe is generally wet, with the exception of Poland which is the only area with a soil moisture deficit. Matif managed to close slightly higher over the week supported by active exports, with weekly export licenses at 643,000t for a season total of 28.4mmt. This is down 2mmt or 6.5% on last year. A big discount to Russia is allowing French wheat to price into a range of destinations that wouldn’t usually be feasible, such as India, which is boosting export figures. There is a bigger crop coming for Russia next season though and in rouble terms, the Russian farmer is still getting a much better price than a year ago, so competition is sure to remain fierce once the new harvest arrives.
UK market
London wheat closed higher on Friday with better volumes traded. Friday was the best day of the week and net gains were slightly higher over the week, with Nov 16 at £117.55/t, £0.25/t higher on the day.